Facebook Ad Prices Rose 40 Percent in Q1

The average price of cost-per-click ad placements on Facebook was 40 percent higher in Q1 2011 than it was during Q4 2010, according to data from Efficient Frontier.

The search and display ad management platform provider said ad prices on the social network have been increasing consistently over the past three quarters, indicating that advertisers are finding “tremendous value” from the platform and therefore investing more heavily in it.

“The marketplace is still relatively new, so we’re seeing strong demand from our customer base,” Efficient Frontier CEO Justin Merickel told ClickZ. “Advertisers are finding areas that are successful for them and wanting to own those niches. They’re stepping up their spend in order to do so,” he added.

According to Efficient Frontier, growth in Facebook ad prices looks set to increase at a similar rate in the second quarter of the year, growing at a rate of around 50 percent, quarter-over-quarter.

On a year-over-year basis, Merickel predicted advertisers will double the amount they invest in Facebook’s ad products, though he warned of possible volatility in what remains an immature market.